Entertainment

Who Will Monetize Social Media?

In 2000, a company in Mountain View, California launched a program for keyword-targeted advertising with 350 clients known as AdWords. That company, Google, is now the undisputed powerhouse of online search and advertising. Like many startups today, it was dogged by constant criticism about its ability to monetize its search engine. Google found success with Adwords and later AdSense; that success turned keyword advertising into a business model still popular today.

Now, the same type of criticism Google received is being shoveled upon startups in the social media space. How can any company make money with a social graph? Is advertising really the answer? But perhaps the more pertinent question is this: who will be the innovator that leads the way in monetizing social media? Google was a trendsetter that sparked an advertising revolution. Will there be another trendsetter like Google? Let's look at some of the top candidates:

Facebook

Perhaps no other company has received more pressure and more attention on the topic of monetization than Facebook. Facebook, which now has well over 175 million users, has been a poster child for success in the world of social media. However, despite a torrent of growth, it has not been able to keep its revenues ahead of its bulging technology costs.

Without the ability to generate larger revenues from its on-site advertising and its virtual gifts, Facebook may be turning to options such as a virtual currency, which could either be groundbreaking or simply fizzle like the company's previous advertising attempt: Facebook Beacon.

Twitter

The new darling of the social media world, Twitter has raised a warchest of funding and sworn to make 2009 the year it implements a business model. It has already begun to insert 3rd party applications in a space on the homepage, and it appears almost certain there will be some form of paid accounts. The question now is whether individuals and businesses will pay for Twitter accounts, and if so how much.

Whichever direction Twitter takes, people will be watching. If Twitter can succeed with premium accounts or another business model, social media services across the world will follow their lead.

Apple

Apple isn't a social media company, so why does it get a spot on this list? The answer is the wild success of the iPhone application store. Apple has succeeded where Facebook has not - in monetizing third party applications. On top of that, it has created a vibrant marketplace for mobile social media.

Will that innovation lead to more social media companies turning to mobile devices for monetization, a place where people seem more comfortable paying for software?

Monetizing Social Media

So will Twitter, Apple, Facebook, or another company find a way to monetize social media effectively? We want to know your thoughts: who will be the leader in monetizing social media?

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